- By Annabelle Liang
- Business Correspondent
image source, Good pictures
Shares in embattled Chinese developer Evergrande plunged more than 80% as they began trading in Hong Kong for the first time in a year and a half.
On Sunday, the company reported a loss of 33 billion yuan ($4.5bn; £3.6bn) for the first six months of the year.
However, this was an improvement over the 66.4 billion yuan loss in the same period a year ago.
Evergrande is at the center of a real estate market crisis that threatens the world’s second-largest economy.
The company added that its revenue in the first six months of this year rose 44% from a year earlier to 128.2 billion yuan. However, its stock fell by 6.3% during the same period.
Evergrande shares have been suspended from trading since March last year.
Earlier this month, the company filed for bankruptcy protection to protect its assets in the US.
Troubles in China’s property sector have added to worries about the world’s second-largest economy’s post-pandemic recovery.
Earlier this month, Country Garden, one of China’s biggest property developers, warned it could see losses of up to $7.6bn (£6bn) for the first six months of the year.
Ratings agency Moody’s downgraded the company citing “elevated liquidity and refinancing risks”.
China’s real estate industry was rocked when new rules were introduced in 2020 to limit the amount of money big real estate companies can borrow.
Evergrande, once China’s top-selling developer, has racked up more than $300bn in debt as it has aggressively expanded to become one of the country’s biggest companies.
After defaulting on loans, Evergrande renegotiates its contracts with lenders.
Chapter 15 protects a foreign company’s U.S. assets while it works to restructure its debts.
Evergrande’s financial problems have rippled through the country’s property sector, with other developers defaulting on their loans and leaving unfinished building projects across the country.
